Sarratt Corporation's contribution margin ratio is 62% and its fixed monthly expenses are $91,000. Assume that the company's sales for May are expected to be $193,000. Required:Estimate the company's net operating income for May, assuming that the fixed monthly expenses do not change.
What will be an ideal response?
Profit = (CM ratio × Sales) - Fixed expenses
= (62% × $193,000) - $91,000
= $119,660 - $91,000 = $28,660
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